UK banks may be facing three more years of PPI mis-selling claims, after the City watchdog extended the compensation deadline, but some are warning the move could see PPI nuisance callers hammer the “final nail in the coffin” of the legitimate telemarketing industry.
The new deadline, set a year later than expected, will be accompanied by a major ad campaign, and is predicted to lead to thousands of new claims from consumers.
And one analyst at Shore Capital reckoned banks could face extra costs of as much as £1bn, on top of the £24.2bn they have already shelled out on PPI claims.
Financial Conduct Authority chief executive Andrew Bailey said: “Putting a deadline on PPI complaints will bring the issue to an orderly conclusion in a way that protects both consumers and market integrity,” he said. “We will ensure that our communications campaign will engage with all those who could be affected, particularly vulnerable consumers.”
But one direct marketing industry insider is fearful the move could spell “disaster” for legitimate telemarketing. He said: “While this is obviously good news for consumers, for our industry it is potentially disastrous. PPI has been one of the biggest drivers of complaints to the Information Commissioner’s Office for years; the prospect of another three years is horrendus.
“Every time a PPI nuisance call is made, our industry’s reputation takes another battering. We are already getting to the point where consumers are getting afraid to answer the phone. This extension will be the final nail in the coffin.
“With all the powers in the world, the ICO can only fine the firms it can track down. The problem is too huge for the regulator to cope. Everyone knows the Telephone Preference Service is broken. The Government review needs to be done sharpish if we are going to get our industry back.”
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